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Negotiation Style #4: Compromise

Feb 26, 2021 | Blog

Our final two negotiation styles are often confused with one another. Whereas next week’s collaborative approach aims to essentially expand the overall size of the pie by creating additional value between whoever is at the table, today’s compromising style is far more a bargaining game that leads to a “I win/lose some, you win/lose some” outcome. By loosening up on certain negotiation terms in exchange for others, an agreement can be reached that will likely satisfy most parties but also leaves plenty of potential value unspoken for. Why is it, then, that compromise remains a common negotiation style? 

Applicable  Scenarios

Despite being inferior to the collaborative approach when it comes to value creation, compromising is especially effective in tight situations in which negotiators are under intense time pressure and pitched against an opponent that they already know they can trust and ideally share a healthy partnership with. Without the luxury of time to explore collaborative efforts and fuelled by a desire to keep the relationship strong and intact, both sides will likely accept the win/lose calculation by meeting halfway and come to a fair agreement that allows them to each move forward.

The compromising style also has its uses when you have little left to offer in the negotiation process or when the relationship with your opponent has become strained. Tensions might alleviate once you give in to some of their terms as they come to realise that you’re willing to incur losses to keep the negotiation going. There is, however, a significant risk to this: like in the case of the accommodating style, a competitive opponent might become increasingly demanding and not reciprocate on any of your terms.

 Risks and Vulnerabilities

Another major issue that follows from the compromising approach can be found in extreme starting positions that skew the natural halfway point heavily in favour of whichever party occupies it, resulting in an unbalanced win/lose negotiation outcome. This effectively does away with the goal of reaching a fair solution for either side. Therefore, be aware that your opponents might try to take advantage of your style by pushing for ever more excessive opening positions that in turn may lead to a greater likelihood of negotiation deadlocks.

As mentioned already, attempts at working with your opponents to expand the size of the pie is beyond the scope of the compromising style. Compromisers tend to be wary or insecure about engaging in collaborative partnerships and they are far more inclined to steer away from these opportunities. By doing so, they leave any potential value that a combined effort could have created on the table.

Safeguards

When negotiating with a compromising opponent, resist the urge to follow their approach of tackling each term or issue separately and independently from the rest. Instead of ticking them off the list in a string of “tit-for-tats”, take your time and try to engage the other side in exploring alternative paths that might deliver additional value over what would have otherwise been a simple exchange or bargaining sequence.

If you encounter an opponent that immediately adopts an extreme opening position, make sure to not let it distract you from the negotiation at hand. Be clear on your goals and what exactly you are willing to trade or give up, and communicate in no uncertain terms that you do not intend to negotiate unless their starting point shifts. Understand that attempts to counterbalance an unreasonable opponent by taking on an early extreme position of your own will likely result in deadlock.

About IntelleXt™

IntelleXt is an AI startup that is revolutionizing the way contracts are negotiated, accelerating time to close, and improving deal terms. IntelleXt’s Intelligent Negotiation Platform™ eliminates the complexities of contract redlines and stakeholder collaboration and optimizes deal terms by applying machine learning during the negotiation process.

Fengwei David An
Written by Fengwei David An

Fengwei David An is IntelleXt’s Game Theory & Analytics Research Manager. He has extensive knowledge and practical experience in decision-making processes, negotiations, and compliance through his work in public as well as in private enterprises.

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